BARRISTER'S BRIEFING: Shaking Off the Rust and Sharpening our Realtor Skills: A Summertime Refresher

Brian Levine, HGAR In-House Counsel/Director of Legal Services & Professional Standards Administrator

Congratulations, you’ve made it! We’re out from under the shelter in place orders. Realtors are out in their counties meeting with clients, listing properties, doing showings, putting deals together and everyone is, hopefully, back to work, even if not at 100%.

Since we went underground months ago, many have gotten a little rusty. If you recall, many things were happening prior to and during our sequestering: new rent regulations, along with controversy and litigation, a renewed concern for agency disclosures, fair housing issues, new advertising regulations, new NAR mandates, new local MLS rules and Executive Orders relating to COVID-19 for Realtors. So, in an effort to shake off the rust and hone our skills, I’ve decided that now would be a good time to revisit all these points in one easy-to-read article.

Rent Regulation

A landlord can only retain the aggregate equivalent of one month’s rent. This means that if a landlord charges one month’s rent for security, they cannot retain any more for a pet deposit, etc. This applies to all residential properties (with few exceptions. For example: rent-stabilized or rent-controlled units, retirement communities, adult care facilities, etc.).

A landlord cannot charge an application fee.

Charging for a background/credit check is limited to $20 (or the actual cost, whichever is less). A background/credit check that is provided by a tenant that was conducted within the past 30 days must be accepted by the landlord in lieu of charging a fee for a new check.

As of today, a landlord can require the tenant to pay all commissions in the transaction. This would include paying the listing agent’s commission and the cooperating agent’s commissions. Litigation on this issue is ongoing and the court will hear arguments in September 2020.

Agency Disclosure

Licensees are to provide an Agency Disclosure form at the “first substantive contact.” This means that a Realtor must present this form at the first meeting with clients, whether in person, or electronically. This would also include customers/prospective clients at an open house.

The Agency Disclosure form should have both advanced informed consent boxes marked off after full explanation of the possibility of these outcomes occurring.

If dual agency occurs, a new Agency Disclosure form should be executed and signed by the buyer, seller and agent(s).

If the client refuses to sign the form, the Realtor must prepare an affirmation and this must be kept in the broker’s file.

Fair Housing and Anti-Discrimination Form

A Fair Housing and Anti-Discrimination Form must be provided at the “first substantive contact” relating to any real estate transaction. This form must be provided to all new clients/customers after June 20, 2020. As a best practice, NYSAR strongly recommends that this form be provided to all clients/customers of the Realtor who had an active relationship with the Realtor prior to June 20th as well.

This form can be provided in person, attached to an e-mail, or by other electronic means with a link to the form, so long as there is language that says the link contains information regarding the New York State Human Rights Law.

If the form is provided in hardcopy or electronically and the recipient is capable of signing the document, it must be signed and returned. If the form is sent via a link along with the language that says the link contains information regarding the New York State Human Rights Law, then that form does not need to be signed. However, a copy of the transmittal should be retained as proof of sending the information.

If the client refuses to sign the form, the Realtor must prepare an affirmation and it must be kept in the broker’s file for a period of not less than three years.

Fair Housing Notice

A Fair Housing Notice must be displayed at all brick and mortar real estate offices.

If the office has listings or other posting in the windows, the Notice must be placed there as well.

If the office does not have listings in the windows, or the office is not accessible to sidewalk traffic, the Notice must be displayed in the same location as the Broker’s license.

The Notice must be displayed at all open houses.

While a licensee is not required to present a copy of the Notice to persons, if one is requested, it should be provided.

A link to the Fair Housing Notice must be placed on the homepage of every licensee’s websites. This notice must be prominently and conspicuously displayed. NYSAR has interpreted this to mean, “above the fold;” meaning that a person should not have to scroll down the page to get to the link.

NYSAR has indicated that if the link cannot be placed on the homepage, then the link should be placed on the post itself. Further, NYSAR has stated that if, after good faith efforts, it is not possible to place the link in either location, then a link back to the agent’s website, which contains the Notice’s link, may be sufficient. The key is that the licensee will have to show the inability to place the link on the medium in question.

Advertising Regulations

New advertising regulations will take effect on November 2, 2020.  NYSAR is recommending that licensees begin implementation immediately. They require brokers and associated licensees that advertise an exclusive listing of another broker to clearly and conspicuously display the name of the listing broker and it would be preceded by one of seven permitted phrases.

This applies to an IDX feed on their website as well as paid advertisements through third parties.

The new regulations also require licensees that pay a third party to place their advertisement that, when displaying another broker’s exclusive listing, it must have words to disclose that it is a paid advertisement, including the word “advertisement” immediately following the name of the licensee.

Clear Cooperation

If a licensee has an exclusive listing agreement with a homeowner/landlord and they advertise that listing to the public, the listing must be placed on the MLS within 1 business day or face fines. This includes office exclusives that are marketed to anyone other than the brokerage’s clients.

Facilitators

Under certain circumstances, if a Realtor is unable to present an offer or obtain access to a property, they can obtain the assistance of a Facilitator. Failure to respond or work with the Facilitator can result in the levying of fines to the listing broker.

Mandatory Rules from COVID-19 Executive Orders

All activities should still be done remotely, if possible.

Masks must be worn and a distance of six feet must be maintained.

Inspections/appraisals/walkthroughs may be accompanied, so long as masks/social distancing is observed.

Accompanied showings may only be done in-person if the property is unoccupied.

Properties must be wiped down before and after all visits.

Only one “party” is allowed in a property at a time.

There are many other “best practices,” so please see my article from last month for their review.